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Home Rates & Surcharges CN analysis: Container freight rates continue to slide on most Indian trades

CN analysis: Container freight rates continue to slide on most Indian trades

There seems to be no real let-up in the rate slide seen on most of the trade routes out of India as trade volume pressure continues, according to the latest market analysis by Container News.

On the westbound India-Europe trade, average contract rates from West India [Jawaharlal Nehru Port (JNPT)/Nhava Sheva or Mundra Port] to Felixstowe/London Gateway (UK) or Rotterdam (the Netherlands) have dropped to US$650 per TEU and US$700 per FEU, from US$850 and US$950, respectively, at the end of April.

For West India-Genoa (the West Mediterranean) shipments, contract rates have fallen to US$700/20' ft container and US$800/40 ft container, versus US$850 and US$950, respectively, a month ago.

Eastbound cargo (imports into India) rates for these port pairings have seen further declines, albeit at a slower pace, month-on-month.

According to the analysis, average rates now stand at US$950/TEU and US$1,050/FEU for bookings from Felixstowe/Rotterdam to West India, versus US$1,050 and US$1,150, respectively, last month.

Similarly, rates for shipments from the West Mediterranean (Genoa) to West India have dipped to US$850/TEU and US$950/FEU, from US$900 and US$1,006, respectively, in April.

Thanks to the two rounds of general rate increase (GRI) attempts by major carriers, there have been some moderate pricing gains on the India-US trades. The analysis has found that contract rates for cargo moving from West India (Nhava Sheva/Mundra) to the US East Coast (New York) have increased to US$1,700 per 20 ft box, from US$1,550, and US$2,100 per 40 ft box, from US$1700, and to US$1,600/20 ft container, from US$1,500, and US$1,800/40 ft container, from US$1,750, month-on-month, for container loads moving to the US West Coast (Los Angeles).

For the West India-US Gulf Coast (Houston) trades, average rates have moved up to US$1,885 per TEU and US$2,837 per FEU, from US$1,735 and US$2,735, respectively, at the end of April.

Major carriers, such as MSC, CMA CGM and Hapag-Lloyd, began seeking a second round of GRIs from 1 May and as the latest rate trends suggest, the success of recovery has been partial as of now.

However, on the US-India trades (return leg), short-term contract rates have continued to drop, by between a 5% to 10% increase, on average, from the levels maintained by major operators last month.

According to the CN analysis, rates are down to US$712/TEU, from US$750, and US$850/FEU, from US$900, for shipments from USEC (New York); to US$1,988/TEU, versus US$2,509, and US$2,376/FEU, from US$2,753, for bookings from USWC (Los Angeles); and to US$1,500/TEU and US$1,800/FEU from the US Gulf Coast, compared with US$1,559 and US$1,868, respectively, a month earlier, into West India (Nhava Sheva/Mundra).

Rates on intra-Asia trades out of India have also seen further declines month on month, with the exception of South China bookings, the CN analysis reveals.

For West India-Yantian (South China), average rates have either held firm or slightly moved up, hovering at US$225/TEU, versus US$200 and US$275/FEU, versus US$300, while for West India-Central China (Shanghai) trades, rates have further tumbled to US$15/TEU and US$30/FEU, from US$20 and US$50, respectively, a month ago.

Average contract rates for bookings from West India (Nhava Sheva/JNPT or Mundra) to Tianjin (North China) has further slipped to US$50 per 2O ft container, from US$80, and US$100 per 40 ft container, from US$160, month on month.

For Indian cargo to Singapore, rates have plummeted to US$10/20 ft box and US$20/40 ft box, from the April averages of US$15 and US$30, respectively.

For Indian shipments to Hong Kong, major carriers are accepting bookings at US$10/TEU, versus US$30, and US$30/FEU, versus US$60, according to the CN analysis.

April prices for West India-Jebel Ali/Dubai shipments have fallen to US$70/TEU and US$140/FEU, from US$75 and US$200, respectively, at the end of April.

Contract rate levels on intra-Asia return leg trades have slid between 10 and 15%, with booking rates from Tianjin to West India (Nhava Sheva/Mundra) seeing the larger declines, the CN analysis found.

Meanwhile, Indian merchandise exports, by value, in April, the first month of the fiscal year 2023-24, took a 13% hit year-over-year, reaching US$35 billion, which data indicates was the steepest monthly decline in three years.

“Exports have now become a national priority, which has helped in providing further momentum to the economy,” said A Sakthivel, president of the Federation of Indian Export Organisations (FIEO), in a statement.

Sakthivel further noted, “The need of the hour is to provide marketing support for further promoting Brand India products and services globally, GST [goods and services tax] exemption on freight on exports along with 3-6 months transition period may be provided, whenever a major change is notified in the Foreign Trade policy, so that the existing contract can be executed factoring the prevailing benefits.”

He went on to point out, “We further hope that exports will start showing better growth numbers starting July, as things are expected to improve from Q3 of the calendar year, with fresh orders or order bookings for festival and new year season beginning to come.”

FIEO also noted that amid trade diversification, India’s industrial fasteners industry has the potential to make strong inroads into the US market.

“Indian companies have undertaken intensive technological developments and presenting advanced lightweight products and hybrid fasteners that find usage in entire industrial sectors especially automotive, aircraft and other industrial applications,” stated the association.

FIEO went on to explain, “As India can offer products of high quality with very competitive pricing, US companies can become more competitive by procuring these products from India.”

Jenny Daniel
Global Correspondent

Contac email: [email protected]

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